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Income from Speculative Financial Transactions will always Lead to Macro-Economic Instability

The International Journal of Latest Trends in Finance and Economic Sciences

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Title Income from Speculative Financial Transactions will always Lead to Macro-Economic Instability
 
Creator Schädler, Tobias
Grabinski, Michael
 
Subject —
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Description Starting with a macro-economic model based upon the NAIRU (the nonaccelerating inflation rate of unemployment), we show that, in a world with no (speculative) financial transactions, the macro- economy shows a stable equilibrium state. Including income from (speculative) financial transactions will lead to instability if the amount is sufficiently large. Considering the present amount of financial transactions, stability is impossible. Therefore, further financial crashes are not only likely but inevitable.Starting with a macro-economic model based upon the NAIRU (the nonaccelerating inflation rate of unemployment), we show that, in a world with no (speculative) financial transactions, the macro- economy shows a stable equilibrium state. Including income from (speculative) financial transactions will lead to instability if the amount is sufficiently large. Considering the present amount of financial transactions, stability is impossible. Therefore, further financial crashes are not only likely but inevitable.
 
Publisher International Journal of Latest Trends in Finance and Economic Sciences
 
Contributor —
 
Date 2015-11-27
 
Type —
 
Format application/pdf
 
Identifier http://ojs.excelingtech.co.uk/index.php/IJLTFES/article/view/Tobias
10.2047/ijltfesvol5iss3-922
 
Source International Journal of Latest Trends in Finance and Economic Sciences; Vol 5, No 3 (2015): September; 922
 
Language en
 
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